Anti-establishment

AfD is 2nd most popular party in latest Bild poll

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The left leaning Bild newspaper published a poll showing the anti-immigrant AfD as the second most popular party in Germany with 16% (+2) The socialist SPD polled an awful 15.5% (-5), it’s worst post war performance. The Greens also polled well.

Yet another country growing tired of politicians from incumbent major parties who are failing to deliver to their constituents.

Regardless of what one’s views are on Merkel’s misguided altruism, it seems fewer people support it at home. Call it racist, bigoted it worse but the fact more people are prepared to back the party that answers their sense of frustration speaks volumes of underlying mood. Either that or the CDU is doing a terrible job selling its message. What does one expect when the media and police are muzzled?

Across the border Poland and Hungary are linking hands in a sign of solidarity to reject the EU’s forced migration quotas. On April 8 Hungarians vote on whether they want Orban’s Fidesz party to stay in power. It looks a formality. The question is by what margin? When 98.4% who voted in the Hungarian referendum several years back to reject forced migration, this seems an election issue which opposition parties stand no chance of getting up if they support it.

Should we trust ratings agencies on US state credit?

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The Financial Crisis Inquiry Commission concluded in 2011 that “the global financial crisis could not have happened without the ‘Big Three’ agencies – Moody’s, Standard & Poor’s and Fitch which allowed the ongoing trading of bad debt which they gave their highest ratings to despite over three trillion dollars of mortgage loans to homebuyers with bad credit and undocumented incomes.” The table above tabulates the deterioration in US corporate credit ratings since 2006. The ratings agencies have applied their trade far more diligently.

As written earlier in the week, US state public pensions are running into horrific headwinds. Unfunded pension liabilities are running at over double the level of 2008. With asset bubbles in stocks, bonds and property it is hard to see how plugging the gap (running at over 2x (California is 6x) the total tax take of individual states) in the event of a market correction is remotely realistic. However taking a look at the progression of US states’ credit ratings one would think that there is nothing to worry about. Even during GFC, very few states took a hit. See below.

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Looking at the trends of many states since 2000, many have run surpluses so the credit ratings do not appear extreme. It is interesting to flip through the charts of each state and see the trajectory of revenue collection. A mixed bag is putting it lightly. Whether the rebuild after Hurricane Katrina in 2005, since 2008 revenue collection in Louisiana has drifted.

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Looking through S&P’s own research at the end of last year it included an obvious reference.

U.S. state and local governments can use pension obligation bonds (POBs) to address the unfunded portion of their pension liabilities. In certain cases, POBs can be an affordable tool to lower unfunded pension liabilities. But along with the issuance of POBs comes risk. The circumstances that surround an issuance of POBs, as well as the new debt itself, could have implications for the issuer’s creditworthiness. S&P Global Ratings views POB issuance in environments of fiscal distress or as a mechanism for short-term budget relief as a negative credit factor.”

Perhaps the agencies have learnt a painful lesson and trying to stay as close to being behind the curve as possible. It doesn’t seem like public pensions are being factored at levels other than their actuarial values. Marked-to-market values would undoubtedly impact these credit ratings.

As mentioned in the previous piece on public pensions, a state like Alaska has public pension unfunded liabilities equal to $145,000 per household, treble the 2008 figure. It is 3.5x annual tax collections. The state’s per capita operating budget of $13,728 per person is way above the national average of $6,826 per person. Alaska relies on oil taxes to finance most of its operating budget, so a sudden drop in oil prices caused tax revenues to sharply decline. The EIA’s outlook doesn’t look promising in restoring those fortunes in any scenario. So S&P may have cut Alaska two places from AAA in 2015 to AA in 2017.

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While pension liabilities aren’t all due at once, the last 8 years have shown how quickly they can fester. It wasn’t so long ago that several Rhode Island public pension funds reluctantly agreed to a 40% haircut, later retirement ages and higher contributions with a larger component shifted from defined benefits to defined contributions raising the risk of market forces exerting negative outcomes on the pension fund.

In 2017, despite a ‘robust’ economy, 22 states faced revenue shortfalls. More states faced mid-year revenue shortfalls in the last fiscal year than in any year since 2010, according to the National Association of State Budget Officers.

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Pew Charitable Trust (PCT) notes in FY2015 federal dollars as a share of state revenue increased in a majority of states (29). Health care grants have been the main driver of this. FY2015 was the 3rd highest percentage of federal grants to states since 1961.

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By state we can see which states got the heftiest federal grants. Most states with higher federal shares expanded their Medicaid programs under Obamacare (ACA) and got their first full year of grants under the expanded program in FY2015.

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PCT also wrote “At the close of fiscal year 2017, total balances in states’ general fund budgets—including rainy day funds—could run government operations for a median of 29.3 days, still less than the median of 41.3 days in fiscal 2007…North Dakota recorded the largest drop in the number of days’ worth of expenses held in reserves after drawing down almost its entire savings to cover a budget gap caused by low oil prices. It held just 5.4 days’ worth of expenditures in its rainy day fund at the end of fiscal 2017 compared with 69.4 days in the preceding year… 11 states anticipate withdrawing from rainy day funds under budget plans enacted for fiscal 2018

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Looking at the revenue trends of certain states, the level of collection has been either flat or on the wane since 2010 for around 26 states. As an aside, 23 of them voted for Trump in the 2016 presidential election. The three that didn’t were Maine, NJ and Illinois.

Optically US states seem to be able to justify the credit ratings above. Debt levels aren’t high for most. Average state debt is around 4% of annual income. Deficits do not seem out of control. However marking-to-market the extent of public pension unfunded liabilities makes current debt levels look mere rounding errors.

Considering stock, bond and property bubbles are cruising at unsustainably high levels, any market routs will only make the current state of unfunded liabilities blow out to even worse levels. The knock on effects for pensioners such as those taking a 40% haircut in Rhode Island at this stage in the cycle can only feasibly brace themselves for further declines. This is a ticking time bomb. More states will need to address the public pension crisis.

A national government shelling out c.$500bn in interest payments on its own debt in a rising rate environment coupled with a central bank paring back its balance sheet limits the options on the table. Moral hazard is back on the table folks. Is it any wonder that Blackstone has increased its short positions to $22 billion?

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All or nothing

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The 2018 Gold Coast Commonwealth Games kicks off on April 4th and surprise, surprise the volunteer guidebook is requesting gender neutral language so as not to offend anyone. They shouldn’t use “ladies & gentlemen” or “boys & girls” but “everyone” to make the games more inclusive. Yet more surrender to politically correct nonsense. Never a truer heart than a volunteer. Yet even their goodwill must be indoctrinated to the grievance culture of the left.

Sadly the very events run completely contrary to that ideology. Events are openly segregated by gender – male and female only. Will the Men’s 100m be called that? Will the Women’s 200m medley be called something else? So while spectators will be encouraged to suck in the political correct fanfare, the athletes will run, jump, swim and wrestle in the name of their gender.

Seriously if the games organizers are so wanting to have volunteers pretend to treat certain people who subjectively identify as something they’re biologically not, why not remove gender and have women and men and any others compete in the same events? Then if men clean up 90% of the events that will be promoting equality. It has been suggested before to give handicaps to certain athletes to even it out. So a female could technically run faster than Usain Bolt if given the right weightings. CM wrote about this stupidity  here.

Alternatively why not accommodate events for all 63 genders. That way an athlete competing in the Feminine Bisexual Hermaphromale 100m maybe by (sorry I don’t know the correct pronoun)-self, therefore guaranteed to get the world and commonwealth records and a gold medal. In fact if by (xie?)self xie (?) could smash all records held by the likes of Michael Phelps in a single games by being the sole athlete. That is the only fair way to hold games if true progressive ideology is to be forced upon us. Everyone competes in their own race.

Finally how could the Commonwealth Games even be held given all member states are former colonies of the British Empire? How about a smothering of white privilege layered on top to truly make the games “inclusive”. Yet more proof the left apparatchiks can’t even get the grievance manual right. Let’s hope they don’t read this because it will call for an emergency reprint requiring more trees to be cut down.

Playing down a mass suicide note

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With the release of the Nunes memo, do top Democrats honestly believe that such collusion by the DNC with the nation’s judiciary and intelligence services doesn’t expose the hypocrisy of a party which proclaims its platform is all about equality and liberal ideals? Does it not expose that these politicians are only in it for themselves? Is it any wonder the Democrats are proclaiming this memo is ‘misleading’ or worse that Americans are too stupid to understand the memo? On reflection they probably had wished they’d stood and applauded during the SOTU address instead of childish frowns of bitterness and playing Candy Crush on their smartphones.

While many Americans probably suspected corruption (so brilliantly conveyed in ‘House of Cards’) for decades, they have had it transparently confirmed.  The DNC hope was that the illegal and doctored FISA application would sink Trump as a candidate and lock in a Clinton White House. By then the scam could be lost as easily as 33,000 emails. Power corrupts. Absolute power corrupts absolutely.

Who could forget Bill Clinton’s chance meeting on a Phoenix tarmac with Attorney General Loretta Lynch the day before her testimony on Hillary’s email scandal? Did anyone honestly believe they just talked about grand children? Lynch downplayed the severity of the private server as ‘careless’. Conservative watchdog Judicial Watch has found 30 pages related to the encounter at the FBI, after being caught for hiding them in another lawsuit.

Obama was front and centre of the Clinton campaign. Hillary caught the jump seat on Air Force One numerous times. Are we to believe that this dossier was never discussed on board? That Obama, so obsessed with protecting his legacy,was in no way complicit in making sure Trump wouldn’t get in the Oval Office?

If we go back to mid 2006, news broke that the NSA was tracking the calls and emails of tens of millions of Americans to create  the “largest and most comprehensive database ever assembled in the world.” In the summer of 2007, the Bush administration pushed FISA amendments known as the “Protect America Act” through Congress which authorized the surveillance of any phone call or email by any American suspected of ‘suspicious dealings’ with ‘foreigners’.

As a presidential candidate in the 2008 election, Senator Barack Obama pledged that there would be “no more illegal wiretapping of Americans”. Post the election win, Obama reversed his position and continued the Bush-era surveillance via FISA. Obama’s Department of Justice aggressively defended court challenges from anyone who suspected their phone calls or emails had been illegally traced.

In his last days as president, Obama authorized the NSA to share its volumous databank on Americans with other federal agencies, opening a can of worms for politicians to dig up dirt. Talk about muddying waters in an already dirty swamp. This seems like a move that could badly backfire if a cleaning house of the FBI and DOJ is undertaken. What option has the president but to do it? What better way to talk of transparency to the American people than lop heads of such duplicitous people.

Therein lies the problem. When the state’s own intelligence services are working so closely hand-in-hand with political parties to keep dynasties alive one has to question democracy. Despite Wasserman-Schulz stabbing Sanders in the back, a mainstream media overwhelmingly behind Clinton, a p*ssy grabbing opponent, we now learn that not even a dossier paid for by the DNC in cahoots with the FBI and DOJ to cheat FISA got Democrats across the line – what a hatchet job.

Even Turkish President Erdogan would blush at the level of ‘duplicity’ of this scandal. This is abuse of power on an industrial scale.  One wonders whether the often made claim that the ‘Obama administration was one without scandal’ maybe tarnished with one of the worst. We haven’t heard the last of this.

Gutter press or smutter press?

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Gutter press. No other word for it. One would expect better from The NY Times. Still why not make a baseless claim for the heck of it should it help paint a narrative? Indeed the Stormy Daniels $130,000 shut-up money story would have legs if she produced the ‘deposit slip’ and the contract which any media outlet would  pay “any price” to insure against any litigation for her breach of it.

Think of the $100s of millions media outlets have spent on tying to take the President down. Whether Russiagate which CNN’s own Van Jones called a “nothing burger” for ratings or MSNBC’’s Rachel Maddow who made that  embarrassing “we got his tax returns!” gaffe. Every celebrity event (Grammy’s, Oscars or Golden Globes) has become more about blasting Trump than blowing wind up the back sides of their own Hollywood hypocrites who blatantly turned a blind eye to all of the sexual misconduct that has gone on for decades in their own industry. Where is the outrage over that? Even career feminist Germaine Greer said that if one opened their legs for a movie role they “consented”.

Indeed if Trump frolicked with Stormy Daniels it appears it was consensual on the basis of the rumours. It is not condoning it but look at all the petty behaviour of Clinton post the election still crying to her elitist buddies in sympathy for losing to a man, who less than a week after the grab p*ssygate scandal, stared down the barrel of a camera to 100s of millions of viewers in the second debate to say “no one respects women more than I do” If indeed it was an election issue, voters overlooked it to boot the establishment. Case closed

Still the one-eyed NY Times has to make baseless read acrosses on Melania’s actions being about her acting in a huff over her husband’s supposed infidelity. Make no mistake had she cheated on her husband the mainstream media would celebrate it and chalk it down for a win for their side. They’d get panels of feminists talking about how his behaviour brought it on and how he deserved it for being a chauvinist pig.

However we shouldn’t point fingers at just the NYT.

Last week The Guardian wrote of Melania Trump: “Seldom seen and even more seldom heard, the former model may not be as popular as her predecessor Michelle Obama, but she is far more popular than her husband. Unfortunately for his Republican administration, she seems to have little interest in using that popularity to do anything of substance with the post.

Well had Tbe Guardian bothered to check, the left has made it clear of how they see her in the public eye. When she went to donate Dr Seuss books for children’s education, the recipient librarian at Cambridgeport School refused to accept the gift, criticizing the Trump administration’s education policies further writing that Seuss’s illustrations are “steeped in racist propaganda, caricatures, and harmful stereotypes,” Never did I know as a child that reading about the Cat in a Hat was some conspiracy by my parents to turn me into a hateful bigot. Now it’s all so clear!

The Daily Mail had to settle a $2.9mn lawsuit and issue a full public apology for libel against the First Lady for suggesting she gave more than “modeling services.” What awful slander! Could it be that the press is hardly lining up to champion anything she might host which is of social good? Is trying to be a good mother by not dislocating her son’s education in the early days a crime?

All the jokes from the left thanking immigrants for marrying Trump because Americans wouldn’t do it flies in the face of the very stereotypes they get so easily triggered over. Indeed the racist president married a Slav. Never mind the contradiction.

While the press can speculate over what FLOTUS might be thinking perhaps they should give her advice on the ways they wish her to behave. Should we anticipate Melania Trump’s hashtags on social media championing flaccid and impotent US foreign policy to terrorist groups like Michelle Obama? Mrs Obama is indeed a highly educated person but that doesn’t automatically exclude Mrs Trump from serving the office gracefully and proudly. The Trumps are a power couple

Yes, her husband leaves much to be desired in the manner in which he serves his country. However the scoreboard suggests many of the things he is doing are working. Such is the bias in the press about how world leaders hate him, CBS painfully admitted almost everyone of them lined up for a selfie with POTUS at Davos.

If we look at the last State of the Union address he blew the left out of the water. Even Van Jones admitted he’s going to do 8 years with talk like that. Now he has far more achievements to crow about. So yes, Melania will be there looking a million bucks and her face will speak of how she feels about Stormy Daniels. Storm in a teacup mode like it.

Hillary only proves how unfit she was for President

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Clinton’s appearance at the Grammy’s reading ‘Fire & Fury’ only shows she has learnt absolutely nothing. Out of touch liberal hanging with her millionaire mates. No humility and yet again shows how she can’t let go the fact that her coronation fell through. Her appearance would be funny only if it wasn’t so cringingly true. At least she can count on the champagne socialists at the Grammy’s buying a copy of her book so they can read about how one can absolve oneself from all responsibility.  Even better it’s discounted.

Will 65.9mn voters buy a copy of Jorge Garcia’s book?

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‪From Michael Moore –

“Here’s how MLK Day was celebrated in Detroit today…

‪”After living in the U.S. for THIRTY years, a 39-year-old immigrant, a resident of metro Detroit, was deported this morning to Mexico. Escorted by ICE agents, he said goodbye to wife and two children before forcibly placed on a flight to Mexico at Detroit Metro Airport. His name was Jorge Garcia. He was brought here to the US from Mexico in 1978 when he was 10-years old, thus making him too old in 2018 to qualify for DACA.”

So let’s be clear, my friends: They are able to do this to this father of an AMERICAN family because YOU AND I are not putting our bodies between the Racist Trump’s ICE thugs and the innocent victims of a country that was founded in genocide, built on the backs of slaves and then maintained by its oppression of women.‬ WHEN do WE end this American Nightmare? When do we start to redeem ourselves from the abhorrent behavior done in our name by a man who was teeing up on the third hole at Mar-a-Lago while Jorge Garcia was being kidnapped and deported this morning? In the name of Dr. King, can we pledge tonight, together with our own families and friends, to defeat these bastards on November 6th and end this madness? I do! Please say you will, too.”

On one level it is extremely sad to see families broken up period.  On the other where does one draw the line on an election promise? Trump was voted in on a ticket to clean up illegal immigration. If exceptions are granted for one person on compassionate grounds surely anyone that can pluck heartstrings would be eligible to remain. Then the law isn’t enforced.

Indeed Mr Garcia may have been a hard working model individual. Presumably he never tried to get mixed up with the law on revealing his true status. One would find it hard to believe that he never saw being deported as a risk in the years of being there, especially after Trump won.

To be  clear, the Deferred Action for Childhood Arrivals (DACA) was an American immigration policy that allowed some individuals entering the country as minors that either entered or remained in the country illegally, were eligible to receive a renewable two-year period of deferred action from deportation and to be eligible for a work.

Complain all one likes about the stupidity of kicking out a supposed upstanding member of the community on an age technicality but to censure the President for enforcing laws on which he won his ticket once again highlights the double standards of the left. Suppose Trump let Garcia stay? One could bet a lot of dollars that Democrats wouldn’t compliment his compassion one iota. Damned if you do. Damned if you don’t. So his decision (playing golf on  a National holiday) is completely rational.

One shouldn’t forget the shameful actions of Obama’s DOJ which blatantly lied to 26 State supreme courts over converting 5mn illegal immigrants to citizens. So egregious were the lies that one Supreme Court judge ordered 5 years compulsory ethics training for every attorney in the DOJ for the scandal. Are lies ok on compassionate grounds?

America is getting what it asked for. Indeed in 2020 they can vote him out but the reality is that a growing number of citizens are seeing fortunes improve and on that basis self preservation will trump compassion every time. Having said that Mr Garcia will likely get a book deal for $100,000s to tell his story. The question is will 65.9mn bleeding hearts buy a copy? One guesses no…when the next opportunity to rant against election promises comes along.

All the polls point to Trump losing control of the house in the mid-terms. Don’t bet on it. No rational person would vote out a formula that is working after a decade of financial destitution.  Once again if you’d believed the polls at election time and bet the house on a Clinton coronation you’d have lost your shirt.